SAB Miller is a South African brewery headquartered in the UK that was acquired by the Brazilian-Belgian beer corporation AB Inbev in 2016, which owned prominent beer product brands such as Miller, Pilsner Urquell and Fosters. The ethical dilemma associated with SAB Miller’s production and distribution involve the sustainability of its supply chain and the hazardous impacts of its products, which are linked to intoxication, alcohol-related deaths and drinking under influence. In particular, the ethical dilemma of SAB Miller products’ ethical impacts was illustrated in the case of their collaboration with the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund). (Matzopoulos et al, 2012) The Global Fund in 2012 named SAB Miller as a funding recipient for an educational program involving reducing alcohol-related harm, especially HIV-AIDS prevention, among men in areas for alcohol consumption such as pubs and nightclubs. (Matzopoulos et al, 2012) This caused significant controversy, because the liquor industry, including companies such as SAB Miller, are responsible for unethical behaviors such as unsustainable supply chains and high rates of alcohol-related deaths and high-risk behaviors such as driving under influence. The ethical dilemma is thus embodied in the fact that while SAB Miller wants to reduce the unethical impacts of alcohol use and production, pursuing such a goal conflicts with the company’s goal of maximizing revenue from alcohol sales. Other ethical dilemmas, such as the 2010 incident where the non-governmental organization ActionAid alleged that SAB Miller avoided paying tax in African countries such as Ghana, Zambia and Mozambique to the tune of £20m each year, have also threatened SAB Miller’s reputation. (Hess and Alexander, 2015)
The perception of the product differs greatly in different regions. In SAB Miller’s home base of South Africa, alcohol is regarded as the third largest contributor to disease burden among South Africans, causing SAB Miller’s products to garner a bad reputation. (Matzopoulos et al, 2012) SAB Miller’s products are also perceived as products targeted more at the older male segment. (Odendaal, 2014) Conversely, in more mature markets such as the U.K. and the U.S., SAB Miller has successfully transitioned to become a trendy product for both men and women, through expanded product lines such as flavoured beers and ciders. (Odendaal, 2014)
SAB Miller has strived to reduce harmful impacts and ethical implications of its product in terms of production and use through a number of strategies. Foremost, in terms of business ethics, SAB Miller has implemented a more sustainable supply chain, through the use of lightweight bottles that reduce carbon emissions, and a supplier code of conduct that ensures fair wages, reasonable working hours, safe working conditions and ethical procurement processes. (Van Kralingen, 2014) Secondly, SAB Miller has launched a number of social responsibility initiatives, such as its Global City Pilots to reduce harmful alcohol use by 10% in six cities, social marketing campaigns to promote safer alcohol consumption norms, and a collaboration with Tufts University to label products with safe consumption instructions. (South African Breweries, 2014) Finally, in terms of integrity, SAB Miller has a strict corporate governance code that forbids corruption in its procurement processes. (Van Kralingen, 2014)
SAB Miller’s leadership (or currently, AB Inbev’s leadership) can instill a culture of ethics in the marketing department by enforcing three policies: a ban on deceptive marketing, clear health warnings, and a restriction on overly sensual imagery. Foremost, SAB Miller should ban any deceptive marketing, such as health claims for their beer products. Secondly, SAB Miller should label their products with clear health warnings. Finally, SAB Miller should not use overly sensual imagery, such as sexualized models or rave party scenes, which would increase its product appeal but also cause controversy over its promoted unethical behaviour.
In conclusion, SAB Miller should strive to instill a culture of ethics in its marketing team by paying attention to its ethical dilemmas, product perceptions and ethical management.
References
Griffin, J. J., & Weber, J. (2006). Industry social analysis: examining the beer industry. Business & Society, 45(4), 413-440.
Hess, M. F., & Alexander, R. M. (2015). Brewing up controversy: A case exploring the ethics of corporate tax planning. Issues in Accounting Education, 30(4), 311-327.
Kleyn, N., Abratt, R., Chipp, K., & Goldman, M. (2012). Building a strong corporate ethical identity: Key findings from suppliers. California Management Review, 54(3), 61-76.
Matzopoulos, R., Parry, C. D., Corrigall, J., Myers, J., Goldstein, S., & London, L. (2012). Global Fund collusion with liquor giant is a clear conflict of interest. Bulletin of the World Health Organization, 90, 67-69.
Odendaal, Natasha. (2014, October 6). SABMiller to challenge perception of beer, eyes mature markets. Retrieved from https://www.engineeringnews.co.za/article/sabmiller-to-challenge-perception-of-beer-eyes-mature-markets-2014-10-06/rep_id:4136
South African Breweries. (2014, June 10). A Healthier World. Retrieved from www.sab.co.za/a-healthier-world
South African Breweries. (2014, June 10). Vision and Values. Retrieved from www.sab.co.za/vision-and-values
Van Kralingen, Tony. (2014, September 1). SABMiller Supplier Code of Conduct: Living Sustainable Procurement. Retrieved from https://sabcms.blob.core.windows.net/wp-content/2016/04/4.-sabmiller-supplier-code-of-conduct-september-2014-final.pdf
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